How do Music Royalties Work? And How are Music Royalties Calculated?

Firstly I would like to say thanks for putting up such a great site, brilliant idea and i hope it proves successful for you

I’m writing to you to ask for your advice on a very tricky area for myself at the moment. I have currently been playing in a band with 3 other friends for almost a year now, we have had relatively quick success and have had label interest from a small indie wishing to work with us.

My question is that of royalties for the songs we have already produced and future works. Our band works in a strange way when it comes to writing. the formula goes as follows:

I am the member who has been responsible for writing the songs, I will write the guitar for the songs by myself, structure the song and record a rough from start to finnish. I will add overdubs and ideas for vocal melodies and bass root notes to accompany.

I then take the song to the vocalist who writes the majority of the lyrics for the song, I have also contributed to this stage of the song writing.

The final stage is a band practice is organized, there the bassist generally follows my song structure by playing the root notes from my playing, the drummer listens to my song and adds the beats.

Now it’s coming to the time to discuss the share of royalties for song writing I would like to know what is the procedure for this, as I write the songs I feel I should get a larger cut. However, technically the fact the bassist and drummer add there parts makes them co-writers, if I’m correct? As for lyrics the vocalist is the major contributor, but I do also have my input.

As you are aware this is a tricky matter for me to raise with my band mates as I don’t want to devalue the work they put in but at the same time I wish to be credited fairly for the amount I contribute.

Any advice on this matter would be a great help, I feel I’m in a no win situation. Again many thanks for your service.

Regards,

Martin

Dear Martin,

Yeah, that’s a tough situation to be in, Martin. On the one end, you don’t want to create lingering resentments among your band mates, if one or more have the idealistic notion that bands should have a “one for all” mentality when everyone splits things equally. On the other hands, if you don’t speak up and your band goes big time, then you’re likely to have a lingering resentment, if you feel like you’ve done the lion’s share of the song creation and you don’t get your fair reward for that hard work.

You’re right that the other members of the band would likely get co-credit for their efforts in writing the song. If the issue is not addressed, the default is equal royalties. So if you feel that the subject of you getting a larger percentage of royalties needs to be discussed, now is the time to discuss it, before a record company releases a record. After that, you’re out of luck.

I want to stay close to the copyright law information I’m looking at, so there isn’t any confusion in the translation. Here’s basically how royalties work, though I would suggest you get a deeper understanding if you’re going to be in the music business. Copyright laws state that when 2 or more musicians collaborate on writing a song (either musically or lyrically), then the ownership is “pro rata”. Pro rata means you share the royalties equally. This happens unless you have a prior agreement that states one member gets a higher percentage of the royalties (and by prior agreement, I mean an agreement in writing, not a gentleman’s agreement).

This is highly important and something that should be addressed before your album is released. The technical definition of collaboration is when a person is integral in the arrangement of the songs, the tempos or the instrumentation.

I would suggest that you buy a copy of a music business “how-to” guide, such as the “The Music Industry: The Practical Guide to Understanding the Essentials” or “This Business of Music: The Definitive Guide to the Music Industry”, each of which can be found on Amazon. For the moment, I’ll direct you to an older copy of The Musician’s Handbook. Turn to page 52 in this pdf for the specific information.

Broaching the Question

If you decide to address your band mates about the issue of royalties, I would suggest you do so in the calmest and least provocative manner possible. This is a question that gets to the heart of what “being a band” means, besides it being a question about potential big amounts of money and who-contributes-most in the band. If your band members have any kind of ego, this might be an unpleasant conversation. Even if it isn’t, it could cause lingering resentments.

The fact that you are concerned about the question tells me that you’re likely to have small resentments if this isn’t addressed up front, and the experts say these are questions that need to be settled before you sign a contract with a record company. So read what you can, determine from what you know of the contributions if your band members deserve an equal share of the royalties and address the question in a calm and reasonable fashion. You might even tell your band members that you’ve been reading about royalties and the music business and these books recommend that a band sit down to discuss this issue.

Whatever the case, arm yourself with as much information as possible. Have a book for your fellow musicians to look at and discuss what it all means. Make this less about the personalities and more about the music business. In the end, you still risk creating hard feelings, but addressing this up front is a good idea, before the lawyers get involved.